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Legere Makes Convincing Pitch for T-Mo/Sprint Merger

By J. Sharpe Smith, Senior Editor

June 22, 2018

T-Mobile President and CEO John Legere answers questions during the T-Mobile Q4/FY 2017 Earnings Call on Thursday February 8, 2018, in New York. (Mark Von Holden/AP Images for T-Mobile)

John Legere always talks a good game. Sometimes it is tough separating the hype from reality, however. Last week, he continued to make his case for T-Mobile’s merger with Sprint, promising faster speeds, lower costs and increased employment in a blog. The merged company will invest nearly $40 billion and will have spectrum and capacity needed for a “broad and deep” nationwide 5G network, the T-Mobile CEO said. Rural coverage will be a big emphasis, he said, which should get the support of Congress.

He said the merged company will provide 5G speeds that are five times faster than the LTE speeds by 2021, while increasing LTE speeds.

“At full deployment the New T-Mobile will deliver fiber-like speeds. I’m talking about average speeds at a blazing 444 Mbps, covering about two-thirds of the country, with jaw-dropping peak speeds up to 4.1 Gbps!!” Legere said.

One of the merger tests that the New T-Mobile must pass is whether their marriage of the two wireless companies will reduce competition and increase costs to the consumer. Legere held that costs will actually go down.

“Analysis by renowned economist Dr. David Evans concludes that the building of the New T-Mobile 5G network will provoke competitive responses from Verizon and AT&T that will result in a decrease in the cost of a gigabit of up to 55 percent and over a 120 percent increase in mobile data supply for all wireless customers,” he said.

Addressing concerns that large swathes of America are unserved or underserved, he said that the merger will result in mobile broadband speeds in excess of 100 Mbps to roughly two-thirds of the population in just a few years and 90 percent of the country by 2024.

“This deal enables New T-Mobile to increase coverage in rural America and create more competition for wireless, broadband and beyond. Case in point: we estimate that 20-25 percent of those new broadband subscribers will be located in rural areas,” Legere said.

As opposed reducing jobs, which most mergers do through taking advantage of synergies, Legere plans on creating 3,000 direct jobs in the first year, increasing to more than 9,600 direct and indirect jobs by 2021 and more than 11,000 by 2024.

“Every day we will have more jobs as the New T-Mobile than the two stand-alone companies would have on their own,” he said. “As we build out our new 5G network and bring these services to all parts of the country we will create thousands of job opportunities.”

No one knows if the Federal Trade Commission will okay the merger, but Legere checks all the boxes that regulators will scrutinize. The merger will increase competition with Verizon and AT&T, he said, lowering consumer costs and establishing competition in rural areas, in places where it doesn’t exist today. And increased employment would be the frosting on the cake. For the wireless infrastructure industry, the promise of a $40 billion capex infusion might be enough to take the sting out of the planned decrease in towers.